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Ford, GM, Chrysler Prey on Toyota Customers

Tundra: now worth an extra $1,000

I shouldn’t feel bad for the world’s largest automaker just because it stands to lose a few percentage points of market share. Toyota is obviously having a bit of a rough patch, and it’s no surprise that other automakers want to take advantage and try to steal some customers.

Toyota’s two latest major recalls and last week’s decision to cease sales of eight models over safety concerns is sure to put the company’s sales numbers at risk. Even longtime Toyota customers are fleeing to other brands.

While it’s a nightmare for Toyota, it’s an opportunity for Ford, GM, and Chrysler to take advantage and get some of those uncertain ToMoCo customers into domestic vehicles.

General Motors was first to woo Toyota owners by offering a $1,000 trade-in bonus for Toyota models. Ford followed suit, and then Chrysler stepped in and is offering $1,000 trade-in cash for any Toyota Tundra, Tacoma, or Sienna owners on a lease or purchase of any new Chrysler, Jeep, Dodge, or Ram vehicle.

I realize that’s how business works, but I think it’s a cheap shot at a company that’s already down. Ford just reported a 2009 profit of $2.7 billion, after a 2008 loss of nearly $15 billion. GM expects a “double digit” sales increase from last January. The companies are starting to turn around, and offering the Toyota trade-in incentives just makes them look like desperate vultures, especially considering many Toyota customers would consider change anyway.

Honda, meanwhile, has decided not to offer any incentives to Toyota drivers, saying in a letter to its dealers, it “will not react in a predatory way toward either Toyota or Toyota customers.”

If I were a disgruntled Toyota driver, Honda would have my attention by acting classy and taking the high road when a respected competitor fell on hard times.

Toyota fans: Will a financial incentive from another automaker draw you away from your favorite car brand, or will you stay loyal?

6 Comments

@casey
That’s a good lesson on the general ethics of car dealers. They offer you substantially less than book trade in value due to Toyota’s problems. Guess where they would set the price if you were dumb enough to bend over for them? You’d be right to guess they’d price it at retail book value.

I recently went to the Ford dealer in Los angeles ca the ford dealer was trying to take full advantage by offering me half of the kbb price for my car a top line model kbb value for trade in is 13500$ he offered around 8000$ sayin becuase its a recall way to go Ford i told whatya think when the fix is out on monday wont u be able to sell the car he said im sorry thats the max i can offer i said no wonder u guys are not selling as many cars as toyota does so much for not takin the bailout ford is tryin to fool everyone with its good image

Good for Honda, and they should make some capital out their action in their advertising. I doubt that the Toyota philosophy would permit them to do the same, but they should. Consumers do respond to such gestures (Ford, Chrysler and GM’s) and sharp marketing could take advantage of that. The U.S. companies just look snarky and greedy. Which of course they are.

@Hollerin
I think if Toyota drivers are treated with respect and the fix is made quickly, an apology from Toyota will go a long ways toward keeping people loyal to the brand. We’ve already seen (somewhat) of an apology from CEO Toyoda and it sounds like a fix is on the way. But it has to happen fast.

I own a Toyota now that’s served me pretty well, but it’s a ’97. I hope to buy a car later this year and will definitely be looking at other makes, too, but I’m curious to see how Toyota follows through on its promises to resolve its recall problems.